Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Key Features of High Risk Merchant Accounts

By Julia Roger Subscribe to RSS | January 11th 2012 | Views:
loading
 
  



What is a high risk merchant account?

High risk merchant accounts are given to businesses that process payments in high volumes therefore run a greater risk of payment related problems such as fraud, payment reversal and chargeback. Being designated high risk can also have to do with the type of product or services offered. These accounts have been made to suit the requirement of these businesses and the rates and charges to obtain one are a bit on the higher side. The charges can be so high that it can affect the profit margin of the company and it may be difficult to maintain such an account.

The businesses are classified as high risk mainly because of the payment processing structure and the products. Online gambling, travel agency, adult content, auto rental, bail bonds, pharmaceuticals, and many other businesses are categorized under this category. This is because while working with these companies, the banks are exposed to higher risk of losing money as most of the transactions are done through credit cards. In many cases, it is seen that the information is incorrectly given or there is a payment reversal.

Not only are there risks of financial loss, there is also risk of administrative fallout. For example, there may be the case where a purchaser wants to pay using a debit card that has insufficient funds. In such a case if the issuing bank approves the transaction, it will fail on the acquiring bank and that leads to administrative problems. There can be a problem with the stolen credit card information as well. For these cases, banks have imposed a high rate and some other safeguards. These safeguards include having a delayed settlement of funds with the merchant and a minimum reserve of 10% of incoming payments, which needs to be kept with the bank for 30 to 180 days, depending on the transactions. There are only a few domestic banks and institutions that deal with high risk merchant services so an alternative option would be to choose an offshore merchant account through a third party lender.

Julia Roger - About Author:
For more information on high risk merchant accounts, check out the info available online; these will help you learn to find the high risk merchant services!

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/finance-articles/key-features-of-high-risk-merchant-accounts.htm

Related Finance Articles Subscribe to RSS

Why merchant loans trump all
Published by Joseph Richard on April 4th 2012 | Finance
Every business needs some help every now and then. That is when you need to consider the different o...
 
New York auto insurance attract high rates
Published by Alabamaauto Insurances on January 17th 2012 | Finance
Residents of New York are some of the people who have to pay high rates in auto insurance policies. ...
 
What are the benefits of merchant cash advances?
Published by Mathias Scott on April 2nd 2012 | Finance
Every business ends up in the dumps once in a while and that is when you will need some instant cash...
 
Asked more Manoj Narang, Take control of about high-frequency tips? to understand
Published by Crofton Holmes on January 5th 2012 | Finance
Quite a few keep attempt to democratize ones character with exceptional research in the real estate ...
 
About high risk merchant accounts
Published by James Blee on February 22nd 2012 | Finance
Every businessperson needs to understand the ways and means to benefit more by fully understanding ...
 
The Benefits of Financial Advice Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
You work hard for your money and you therefore need to ensure that you properly manage it so that yo...
 
The Benefits of Financial Advice Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
You work hard for your money and you therefore need to ensure that you properly manage it so that yo...
 
Pensions in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Pension is a money received after retirement or end of a work agreement. It is mostly associated wit...
 
Pensions in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Pension is a money received after retirement or end of a work agreement. It is mostly associated wit...
 
Pension in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Leeds has many financial advisors especially those dealing with pension. Pension is very important e...
 
Pension in Leeds
Published by Fredrick Gavin on August 24th 2012 | Finance
Leeds has many financial advisors especially those dealing with pension. Pension is very important e...